Good morning. The annual WSJ CIO Network meeting, this year in San Francisco, imparted upon us a greater appreciation for the critical role that people play in the IT stack. We, the people, are the top layer, at least for now. We may be the bottom layer if AI fulfills expectations for its exponentially growth. Yet for the moment, we are number one, for better or worse.

What is the biggest impediment to digital transformation of business? "People," Kaiser Permanente CEO Bernard J. Tyson said during a panel discussion with Jason Dean, the WSJ's global tech editor and Jeanne Ross, of the Center for Information Systems Research at MIT's Sloan School of Management. You need to take your people on a journey. Once they get it, you have made it to the other side, Mr. Tyson surmised. Along the way, he appreciates direct communication from the CIO. The CIO should never tell the CEO that everything is okay. "The worst thing a CIO can tell you is how great everything is going to be," he said. "Change is hell." Ms. Ross said that the best way to get that buy-in is to make sure leaders meet early and often.

Mr. Tyson said that Kaiser Pernamente is not a tech company. Nonetheless, if he was building his company today from scratch, he said he would start with technology and marry it with people.

Miss the WSJ CIO Network? Click here for our complete coverage of this week's event in San Francisco.

SECURITY AND PRIVACY

As a result of its review, Yahoo’s board won’t award CEO Marissa Mayer her 2016 cash bonus.

BLOOMBERG NEWS

Yahoo board finds faults with executive actions during security breach.Yahoo Inc. said CEO Marissa Mayer will take a pay cut after a board investigation found that she and other senior executives failed to ‘properly comprehend or investigate’ a 2014 security breach that hit more than 500 million accounts, the Journal's Deepa Seetharman and Robert McMillan report. The company in its annual filing reported that the board found that “failures in communication, management, inquiry and internal reporting contributed to the lack of proper comprehension and handling of the 2014 security incident.” The 2014 breach was separate from the much-larger 2013 breach, affecting more than a billion accounts.

Lawyers take the fall. Ron Bell, Yahoo's head lawyer, will resign, Recode reports.

And there's more. Yahoo reported Wednesday that 32 million user accounts have been accessed over the last two years by hackers using forged cookies that allowed them to bypass user passwords. The company believes the intrusions were related to the "same state-sponsored actor" responsible for the 2014 breach. Reuters has the story.

TECH EARNINGS

Box posted a fourth-quarter loss of $36.9 million, or 28 cents a share, compared with a loss of $50.4 million, or 41 cents a share, a year earlier.

DAVID PAUL MORRIS/BLOOMBERG NEWS

Box narrows loss. CEO Aaron Levie said the company delivered positive free cash flow—a closely watched metric for startup technology firm—for the first time during the fourth quarter. While never posting a profit, the company has narrowed its losses amid a fiercely competitive market for cloud storage and collaboration for businesses, the WSJ's Anne Steele reports.

TECHNOLOGY NEWS

Snap, parent of the popular disappearing-message app Snapchat, last month projected its initial shares would price between $14 to $16 a share.

BLOOMBERG NEWS

Snapchat parent valued at $24 billion. Snap Inc. shares priced Wednesday at $17 each, above the projected range and valuing the company at nearly $24 billion, in the biggest U.S.-listed initial public offering since Alibaba Holding Group Ltd. made its debut in 2014, the WSJ reports.

Vanguard compensates for outage. Vanguard Group is reimbursing commissions charged on some trades when the index fund giant’s website suffered an outage Feb. 17 that left many clients unable to log on to their accounts for part of the trading session, the WSJ's Sarah Krouse writes. Representatives for Vanguard have said they are hiring additional staff and investing more in technology.

McDonald's goes mobile. The restaurant chain is planning to roll out mobile ordering and payment in 20,000 restaurants in some of its largest markets, including the U.S., by the end of the year, the Journal's Julie Jargon reports. The chain also is testing curbside pickup in the U.S. McDonald’s said that 75% of the population in its top five markets live within 3 miles of a McDonald’s and that more than one billion people globally live within five to 10 minutes of a McDonald’s.

Foxconn considers Toshiba's flash memory business. Chairman Terry Gou said his company is bidding for Toshiba Corp.’s flash-memory unit, as the two businesses would be a good match, the WSJ's Eva Dou writes. Analysts expect Toshiba’s computer-chip unit could fetch $20 billion or more.

Lyft strikes as Uber stumbles. Ride-hailing company Lyft Inc. is pitching investors on a new funding round that it hopes will net at least $500 million and a valuation of between $6 billion and $7 billion, the WSJ's Greg Bensigner reports. The San Francisco company runs a distant second to crosstown rival Uber Techologies Inc., currently in the middle of several controversies including sexual harassment allegations, a lawsuit from rival Alphabet Inc.over stolen trade secrets, and an embarrassing video of Chief Executive Travis Kalanick yelling at a contract driver.

Rift meets cliff.Facebook Inc.’s Oculus VR is dropping the price of its Rift virtual-reality headset by $100 to $499, in a bid to spur sales after a rocky first year for the device. The price doesn’t include the cost of a computer powerful enough to support the Rift, says the WSJ's Sara E. Needleman. But with virtual reality still in search of that killer app or game, some analysts believe it will take more than a price drop to lure mainstream customers.

EVERYTHING ELSE YOU NEED TO KNOW

Several major U.S. drug companies have squelched an investor campaign aimed at forcing companies to disclose more information about when and why they raise prices. (WSJ)